THIS week Rupert Murdoch’s News Ltd took The Australian behind the paywall. The interesting point is that the paywall is not very high – just $2.95 a week, say $12 a month. If you do not pay for a login you no longer get the full suite of articles. 
The big question is will the other News Ltd capital city papers in Sydney, Melbourne, Adelaide, Brisbane, Hobart, Darwin follow, and what will Fairfax do with its papers in Sydney, Melbourne, Canberra, Newcastle and elsewhere.
Fairfax’s Australian Financial Review is already paywall. It has been a high paywall – around $30 a month depending on the deal you cut. But it is a specialist paper for people who can afford it.
This is not a Coles v Woolworths struggle over the price of milk and potatoes. It is more serious than that. The struggle is not so much between Murdoch and Fairfax but a struggle by each of them to fund newsrooms that produce quality journalism.
In the century or so from 1880 to 1980 the rivers of gold in the form of classified advertisements funded the journalism that informed the public on great political questions and the events around the parish pump, and entertained and titillated them with the trivial, the bizarre and the doings of celebrities.
Radio and television news largely followed those newspaper newsrooms (public broadcasting current affairs aside).
Then new internet companies stole a large chunk of the classifieds, particularly for cars, jobs and personal (Facebook).
The funding for quality journalism is under threat. Fewer journalists have to fill the same space. It is a matter of major public importance. Newspaper newsrooms have been keeping governments, corporations and others under their watch for decades. It has been essential to the proper functioning of democracy.
At first newspapers underplayed the internet, thinking it would go away or that newspapers could easily co-exist as they had done with TV and radio.
But this is different. This is more like the threat cassette tapes posed to vinyl records and the threat CDs posed to tapes and now ipods and MP3 players pose to CDs. The older technology died out.
But the transition is more difficult for newspapers. People have come to expect all internet content to be free. Worse, you cannot have a smooth transition to the new technology with the old gradually fading away. There can be no gradual fade away. It will be sudden and dramatic. This is because of the high cost of producing the first copy off the press – press crews, winding a web of paper through the press, people inputting and laying out advertisements (while internet competitors can get their advertisers to put the data into a template), delivery infrastructure and so on.
One day it just becomes uneconomic to do a print run of just, say, 25,000, even with cross subsidies from the Saturday edition. So you stop and go internet-only. Many newspapers in the US have done this, especially in formerly two-newspaper cities.
The timing of the change has been unfortunate. If the cost of ipads and other tablets had come down by now to, say, $100 (as they inevitable will) the newspaper companies could have given ipads to every two-year subscriber – as with mobile-phone billing plans — and they could turn the presses off.
The delivery method is not important – it is what is being delivered that matters.
Tablet reading is as good, if not better, than paper. You can increase the type size and carry the equivalent of 100 newspapers and 100 books on a device whose weight and volume is not much more than one book.
Meanwhile, the broadcast corporations are moving more into text.
The ideal news medium is text and video – not the truncated text of TV news or its padded video of pictures for the sake of pictures.
Murdoch has complained about the publicly funded competition from the ABC and BBC. He also complains that Google and other search engine aggregators are stealing the content his journalists have created. Google puts up search results with accompanying advertisements. It is getting revenue from newspapers’ efforts.
Murdoch has a point. But will the paywall be the answer?
Will people pay for internet content? Instinct says not. Why pay for something you can get for free? So much will depend on what others do. And both Murdoch and Fairfax have sensed there is a paying internet market.
Some news junkies are willing to ride the internet throughout the day, but most would prefer to stick to old habits: a willingness to spend 20 minutes to an hour a day absorbing material selected for them that will provide them with essential news and commentary about their city, nation and the world to make them a reasonably well-informed connected member of society – plus a bit of entertainment.
The Australian’s new paid service provides five-minute and 10-minute round ups. Fairfax provides, on subscription, The Sydney Morning Herald on line in the exact page-by-page newspaper format. Each story is clickable and expands into a more readable type.
People, at least in the higher income brackets, appear willing to pay for this, rather than having to wade through masses of material or material ordered according to newness rather than importance.
Too often the newspapers online – let’s call them NOLs – will put a minor incident which happened five minutes ago ahead of the major stories of the day.
The pay model could well work in Australia, which has just two major newspaper companies. It may work in the US where parochialism will drive people to their city’s only newspaper, even if they have to pay.
But it is not working in Britain – which has eight or nine dailies, and one – The Guardian – which has said it will never go behind the paywall. It thrives with huge numbers of links to it and from it.
That will have an interesting political fall-out. As the Murdoch right-wing Times restricts itself behind the paywall, the leftwing Guardian is becoming an international organ now gaining more hits than any other English-language newspaper aside from The New York Times. Its influence in Britain is also gaining – along with extra advertising revenue.
If the centrist Fairfax stable preferred the Guardian model, the anti-Labor influence of the right-wing Australian might wane as the links to it and from it dwindle. Like The Times in Britain, it might folds in on itself in an insular, self-congratulatory way behind the paywall.
This week’s move by Murdoch in Australia could be an opportunity for Fairfax. Fairfax could aggregate its national coverage (now splintered into The Sydney Morning Herald, The Age and The Canberra Times) and provide a national online newspaper with offshoots (with news and advertising) for each major city.
CRISPIN HULL
This article first appeared in The Canberra Times on 5 November 2011.